Funding cuts by the provincial government are going to cost the City of London at least $3 million, and municipal politicians are trying to prepare for the pressure.
During a meeting of the Strategic Priorities and Policy Committee on Monday afternoon, city councillors and staff began the process of putting together the next multi-year budget that will serve as London’s financial road map from 2020 through to 2023.
In a report that was considered by the group, staff noted that if councillors want to maintain current levels of service while working on accomplishing some of the goals laid out in the recently approved strategic plan, the group should look at a 2.7 per cent target property tax increase per year.
If they want to meet all of the goals laid out in the plan, it would require a 3.2 per cent tax increase each year.
Those estimates, however, were complicated by the provincial budget that was released last month by the Ford Tories.
The document features funding cuts to services totalling $3 million so far, but London’s treasurer Anna Lisa Barbon told the committee the figure could soar to more than $4 million per year.
Given the impending downloading of costs, Ward 6 Coun. Phil Squire suggested the property-tax increase may need to be higher than the proposed 2.7 per cent.
“There’s just too much uncertainty to have me say this is the benchmark. I hate to say this, but this may be a benchmark that this council’s not prepared to meet,” Squire said. “This council may want to go higher. Not this councillor, but this council may want to go higher to meet some of the promises that I saw in the strategic plan and some of the promises we made in a general way to the community on issues in the strategic plan.”
Ward 2 representative Shawn Lewis balked at the idea of hiking taxes by 3.2 per cent each year, saying it wasn’t clear that amount would even cover all of the strategic priorities.
“That would be much higher than I’d be comfortable going with,” he said. “I have a lot of seniors in my ward and to start adding that kind of money to their property taxes, I know for some of them, we’re putting them out of their homes.”
Coun. Squire also raised concerns about allowing property taxes to creep higher.
“I’m very concerned about where we’ve put ourselves as a council through our work the last five years. We’ve increased taxes over 13 per cent including this year and now we’ve hit that situation that’s tougher than any situation in the past and we’re going to find huge difficulty in dealing with it as we move forward.”
Mayor Ed Holder said he doesn’t want the property tax increase to the cost of living, but the provincial funding changes do introduce greater uncertainty and doubt in the process of determining what the increase will be.
He echoed the sentiments of Ward 9 Coun. Anna Hopkins who said the group needed to start somewhere in terms of setting a target.
“We have to do some tweaking and looking hard at some areas and we’ll make some decisions about some of the things that we’ve agreed that we would do. I think there will be an opportunity to put some things over, over time and not necessarily in the next four years,” Holder said.
“I’m not uncomfortable with giving staff a target knowing that there are going to be some adjustments as we go forward.”
Ultimately, the committee voted 12-3 in favour of endorsing 2.7 per cent as the property tax increase target for the 2020-2023 multi-year budget. The group also voted in favour of setting another meeting for the committee to discuss the pending service cuts and their impact on the city’s finances.
The committee’s decisions are expected to be approved at next week’s meeting of city council.